MACRS 15-Year Property — Depreciation Schedule 2025 & 2026

What qualifies as 15-Year property?

• Land improvements — fences, sidewalks, parking lots, landscaping
• Qualified improvement property (QIP) — interior improvements to nonresidential buildings
• Qualified retail improvement property (post-TCJA rolled into QIP)
• Qualified restaurant property (post-TCJA rolled into QIP)
• Gas station building improvements and certain wharves
• Municipal wastewater treatment plants and telephone distribution plant (pole lines, cable, underground conduits)

Source: IRS Publication 946, Table A-1. If your asset is not explicitly classified, consult Rev. Proc. 87-56 asset-class tables or default to 7-year property.

MACRS depreciation schedule — $250,000 asset

Worked example: a $250,000 property placed in service with no Section 179 and no bonus depreciation, showing the raw 15-Year MACRS schedule.

Rates from IRS Publication 946 Table A-1. Computed at build time — no hardcoded schedules.

IRS Table A-1: the full 15-year MACRS depreciation table

The complete 15-year recovery-percentage table under the General Depreciation System (GDS), half-year convention — the same percentages published in IRS Publication 946, Appendix A, Table A-1 — shown per $100,000 of depreciable basis. The method is land improvements: 150% declining balance, switching to straight line; qualified improvement property: straight line, which is why year 1 shows only half of the full-year rate.

Percentages computed at build time by the same engine that powers the depreciation calculator and verified against IRS Publication 946 Table A-1. Assumes no §179 or bonus depreciation and the half-year convention. To apply a rate, multiply your remaining depreciable basis (after any §179 and bonus) by the percentage for that recovery year.

With §179 + 100% bonus depreciation

For a $250,000 asset placed in service in 2026, electing §179 expensing (up to $2,560,000) plus 100% bonus depreciation on the remaining basis.

With §179 capped at the full asset cost and 100% bonus on the rest, a 2026 purchase can be nearly fully expensed in year one — subject to business-income limitations for §179 and the acquisition date for bonus depreciation.

Section 179 and bonus depreciation — 2025 vs 2026

Source: One Big Beautiful Bill Act (signed July 2025) and IRS Rev. Proc. 2025-32 (2026 inflation adjustments). The 100% allowance is keyed to the ACQUISITION date, not the placed-in-service date (OBBBA §70301(c)(1)): property acquired before 2025-01-20 stays on the pre-OBBBA §168(k)(6)(A) phase-down for whatever year it is placed in service — 80% (2023), 60% (2024), 40% (2025), 20% (2026), 0% from 2027.

How §179, bonus depreciation, and MACRS stack

1. Section 179 comes first. You elect a dollar amount up to $2,560,000 (2026), reduced dollar-for-dollar once total qualifying purchases exceed $4,090,000. The deduction cannot exceed your business taxable income — any excess carries forward.
2. Bonus depreciation applies to what is left. 100% of the remaining basis is deducted automatically for qualifying property acquired on or after 2025-01-20, unless you elect out for the class. Unlike §179, bonus has no dollar cap and no business-income limit — it can create a net operating loss.
3. Regular MACRS covers the remainder. Whatever basis survives §179 and bonus follows the 15-year percentage table above over 16 tax years.

Because bonus is 100% for property acquired on or after 2025-01-20, the MACRS table only governs basis you deliberately leave behind — by electing out of bonus, electing less than full §179, or hitting the business-income limit.

Half-year vs mid-quarter convention

The percentage table above assumes the half-year convention — the default, which treats every asset as placed in service at the midpoint of the year regardless of the actual date. IRS Publication 946 requires the mid-quarter convention instead when more than 40% of the aggregate depreciable basis of ALL MACRS personal property placed in service during the year goes into service in the last 3 months of the tax year.

When the test is failed, every personal-property asset placed in service that year switches to its mid-quarter table: each asset is treated as placed in service at the midpoint of its quarter, so a fourth-quarter purchase earns only 1.5 months of first-year depreciation instead of 6, while a first-quarter purchase earns 10.5 months. Two planning notes: basis you expense under §179 is excluded from the 40% test, and real property never counts toward it — so timing large Q4 equipment purchases (or covering them with §179) preserves the half-year convention for everything else.

Source: IRS Publication 946, ch. 4, "Which Convention Applies?" The mid-quarter percentage tables are Tables A-2 through A-5 in Appendix A.

GDS vs ADS for 15-year property

Everything above uses the General Depreciation System (GDS) — the default MACRS system. The Alternative Depreciation System (ADS) stretches the same basis over a longer period using straight-line only.

Both land improvements and qualified improvement property (QIP) use a 20-year ADS period — real property trades or businesses that elect out of the §163(j) interest limitation must depreciate QIP under ADS. On the $250,000 example, ADS spreads deductions evenly at about $12,500 per full year instead of front-loading them under land improvements: 150% declining balance, switching to straight line; qualified improvement property: straight line.

Common mistakes and gotchas

• QIP was mistakenly left at 39-year property in the original TCJA text ("retail glitch"). The CARES Act retroactively fixed this to 15-year, effective 2018-01-01. Amending older returns may recover missed deductions.
• QIP must be made by the taxpayer AFTER the building was placed in service; improvements at original construction do not qualify.
• Roofs, HVAC, fire protection and alarm systems and security systems are §179 property only when they are improvements to nonresidential real property placed in service after the date the building was first placed in service (IRC §179(e)(1)); they are NOT automatically QIP, which covers interior improvements — confirm which regime applies.
• Land itself is never depreciable. Only improvements to the land (grading, paving, fencing) qualify as 15-year.

Frequently asked questions

MACRS asset classes compared

Run your own schedule with the MACRS depreciation calculator, and estimate the tax bill when you sell with the depreciation recapture calculator.